Transport & Logistics Infrastructures Continue to be Refined in the Age of Convenience
This sector contributed $18.5M or 3% of the Philippine deal value since 2018. Investment activity in this sector primarily relates to the expansion of transport solutions to address urban traffic or the rise of e-commerce and other parcel delivery services.
Various sectors such as healthcare and retail heavily depend on logistics services. The expanding population and the archipelagic landscape of the Philippines drive demand for an efficient delivery and transport system. With consumer spending expected to increase in the coming years, these sectors are expected to benefit along with the logistics industry. Logistics companies continue to invest in technological solutions to keep up with retail sector growth, especially in terms of e-commerce. Forecasted revenues for logistics and warehousing is expected to reach Php 1.1 trillion by 2024.
Although the entry of ride-hailing companies was not easy due to the lack of regulatory frameworks and policies, it has recently been one of the most optimistic markets in the country. Revenues from the Philippine ride hailing and taxi market is expected to have an annual CAGR of 17% from 2020 to 2024, reaching USD 1.1 billion by the end of 2024. Since Grab’s acquisition of Uber in 2018, the former remains the top market player in the industry, but there have been new entrants accredited by the Land Transportation Franchising and Regulatory Board, such as Go Lag, ePickMeUp, Snappy, and MiCab. This sets the stage for increased competition in the next few years; however, with recent limitations in mobility due to the COVID-19 pandemic, ride-hailing and transportation took a large hit in 2020, seeing a 34% revenue decrease from the previous year dropping to USD 571 millionfrom USD 769 million in 2019.
On the other hand, the logistics sector has been positively impacted by the pandemic together with the rapid surge of the e-commerce industry. Due to strict social distancing protocols, a great number of Filipinos have switched to shopping online and having their goods shipped to their own homes. Dominant names in the logistics industry include long-established companies 2Go and LBC, but regional players such as NinjaVan, Transportify, LalaMove and Grab have increasingly gained traction in recent years as the express delivery market experiences promising growth, anticipating a 9% CAGR from 2018 to 2023, or a value of PHP 68.2 billion by 2023. Local startups such as Angkas, Mober, Payo and Last Mile are also poised to find greater relevance in the space as the demand for Third Party Logistics (3PL) services continues to boom, expecting to achieve a revenue share of 40% in the overall Philippine Logistics and Warehousing market by 2024.
NOTABLE DEALS IN THE PAST 3 YEARS